Features
November / December 2018

A Culture of Innovation

Andre L. Walker, CPIP
Susan Sandler
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A corporate culture that supports creative thinking can help pave a road to innovation. Free people from fear and encourage them to do their best and you’ll have an environment for accomplishing great things, according to George Scangos, who has led Biogen and other pharma companies. In a recent conversation with PE, Scangos shared his approach to building a culture of innovation and provided updates about his latest endeavor, Vir Biotechnology, whose mission is the war on infectious disease.

Innovation is a goal of pharmaceutical development, but without a culture to support it, innovation may be elusive. Develop a good culture and you lay the groundwork for good people to do their best work, which will bring new ideas forward. This approach is one that George A. Scangos, PhD, has followed in the cultures he has built or contributed to in leadership roles at organizations including Biogen, Exelixis, Inc., and Bayer Biotechnology.

His latest venture—which takes innovation in pharma development to new ground—may sound more like an adventure: a biotech company on a quest to treat and even vanquish infectious disease, with an approach that eschews traditional development models for something very different. Vir Biotechnology, Inc., headquartered in San Francisco, California, is “using breakthroughs in immune programming to manipulate pat hogen-host interactions. The company will take a multi-program, multi-platform approach to applying these breakthroughs, guided by rigorous science and driven by medical need.” 1

Pharmaceutical Engineering recently talked with Scangos about his philosophy toward corporate culture, how it contributes to an environment that supports innovation, and about the exciting developments at Vir.

Culture Rules

“Culture is huge for any company, not just pharma companies,” Scangos said. “It impacts productivity, the view of the people to- ward the company and themselves, and whether they are willing to go the extra mile. People should feel good about the company, they should feel that it is doing something worthwhile, that they are doing something worthwhile, and that they are working with colleagues who value them.”

Creating and sustaining a positive culture will support an innovative environment. “Innovation is critical to the industry,” Scangos said, noting that most innovative ideas may at first be considered far-fetched. “You need to be able to distinguish ideas with merit from those that don’t have merit. Leadership needs to be able to do this.” But leaders need to do this in a manner that means people are not afraid to put forth innovative ideas.

Scangos saw the effects of what he called “destructive elements” of culture in some of the organizations he has worked with. Key among them: an environment in which employees are afraid to make a mistake. “Fear of making mistakes is a natural human fear but if you are not making mistakes, you are making safe decisions. You can’t make a great organization by making all safe decisions.” Risk taking is an important part of the work that pharma companies do, and people should be encouraged to take responsible risks, he said. “If you take a calculated, thoughtful risk and it doesn’t work, that should be celebrated—not punished. Part of what distinguishes really great companies is that they can distinguish between really good risks that did not work out and bad decision-making that did not work out.”

Hierarchy and Culture

Other dangers can be hierarchy and bureaucracy. Process and some organizational structure are important and necessary to run a business, especially one that operates in a regulated industry, he noted. And the type of pharma company can have an impact on the amount of organizational structure that is needed: for instance, a GMP manufacturing plant making commercial product requires standard protocols rigidly applied, while process science organizations have room for the flexibility to try new things.

But too much hierarchy and bureaucracy can sometimes let people lose sight of the fact that everyone in the organization has a voice. “We all have a job to do, a skill set, families, and lives outside of the company. Everyone needs to be treated with respect, from the janitor to the CEO—we’re all just people.” He acknowledged that “it’s easy to say that as a CEO, harder to say when you are further down [in the hierarchy], but people should not be afraid to speak up. That kind of candor is really important.” The threat of bureaucracy that grows tends to happen in the middle levels of a company, demonstrated by proliferating committees and meetings that may not be needed. “People can spend too much time sitting in meetings and not enough time actually working.” Balancing the need for structure with the need to make sure people have time to do productive work is important. This can be more challenging in a larger organization, since they need more controls and organizational structure.

A related issue is productivity, which bureaucracy can impact. “People need to value their own time and value themselves. Ask yourself, what are you doing hour to hour and day to day to make the best use of your time? I remember earlier in my career that there were times when I thought something was a waste of time, that I could be doing something productive or fun instead. People need to think in those terms—is what you are doing really the best use of your time and your talent? If not, do something different.”

Scangos felt that there was some success in making changes with these cultural elements during his time at Biogen, but he emphasized that the care and feeding of culture is a never-ending endeavor. “Changing culture isn’t something you do and it’s done. Culture is something you do and keep doing, and you work on it over time.”

George Scangos
George Scangos

Making Change Happen

Communication is another important component of a good culture. To illustrate this, Scangos relayed the story about adding video to his quarterly CEO calls with Biogen employees. Initially these were voice-only calls, and the IT staff encouraged him to try a video option so employees could see him. However, the first attempt resulted in a crash with many employees logging in to view the call. “People said, ‘Those IT guys are going to get in trouble now. What are you going to do?’” What he did was support another attempt at implementing video on the next call. “The video worked like a charm, and during the call I thanked the IT people for going out on a limb and trying to make things better.” The message conveyed—that it was OK to try something new and not have it work, without fearing repercussions—is powerful, he noted.

Changing an existing culture can be more difficult than establishing one in a start-up such as Vir, Scangos said. “In large pharma companies with many employees, it is hard to deviate from the mean. A start-up is small, and it can and does deviate from the mean—which could be better or worse. Biotech companies are self-selecting aggregates of people. Given a sound strategy, financial strength, and talented staff, this will attract more good and like-minded people. In a company like Vir, we have the opportunity to start out with really high quality and build the culture as we want it.” But a new culture’s organization still requires care and feeding. “Culture establishes itself if you don’t work at it. Even in a start-up it takes effort to make it one that you like and is productive. It’s easier to start from scratch and build it.”

Managing Culture When You’re Not the CEO

You don’t have to be the CEO to improve the culture— and innovation and productivity—around you. If you’re managing a division or a department, you can affect three areas of culture: in your department or division, managing up (your relationship with your supervisor is a cultural relationship), and managing your peers.

For mid-level managers, the issues are no different from those faced by a CEO, Scangos said. “You must manage people, treat them well, and treat them with respect. Strike a balance between not overmanaging and paying enough attention to be sure they are doing their jobs well; if they are and they need help with an issue, get them the help they need. If they are not doing their jobs well, then you need to deal with that.”

“Managing up,” or managing your direct supervisor, is the second place where a mid-level manager can affect culture. You may not think this is an important component, and Scangos acknowledged that he did not think so either at a point earlier in his career. “My view was that I should do my job as well as I could, do it really well, go home, and feel like I’d done as well as I could. If I did well, the company would recognize and reward me appropriately, and if I didn’t, I’d suffer the consequences.”

A good relationship with your boss is also part of succeeding at work. Scangos advised speaking candidly, but warned “not all bosses tolerate that, so you need to be a little careful. Figure out how to best deal with your boss. In most cases, supervisors of people appreciate if you point out something that can help them do their job better and make them look better. No one is truly resistant to good ideas—but they may resist how those ideas are broached.”

Finally, mid-level management is also about cultural interactions among peers. Beware the insecurity that can come as individuals rise in the organization; for instance, some may feel challenged by younger peers who are moving up. Building relationships with your peers is a part of managing the culture around you.

What can you do if the culture above you does not align with the culture you favor? “All you can do is make sure that the sphere of influence you have has the culture that is most productive, and your group does its work as well as it can,” Scangos said. Politics, competition for advancement, even bad behavior happen. Despite these challenges, “do your job as well as you can, treat your people well, and have good relationships with your boss and with your peers.”

Vir’s Culture of Innovation

Starting from scratch and building a culture—along with a different approach to developing pharma solutions—is part of Scangos’s current role as CEO and Director at Vir. The company launched in January 2017 with the goal of developing drugs to fight and prevent a range of infectious disease. Hepatitis B, tuberculosis, and influenza are among its initial targets.1

At the time of its launch, Vir defined its approach as a new one in biotech, using multiple platforms and a lack of a technology-specific approach, with initial funding support from ARCH Venture Partners and the Bill & Melinda Gates Foundation, among other sources. ARCH Venture Partners’ co-founder Robert Nelsen developed the concept for Vir and led its formation.1 Since the launch, Vir has built a pipeline through acquisition and partnerships, including acquiring Humabs BioMed SA, Bellinzona, Switzerland, and initiating partnerships with Alnylam Pharmaceuticals, Inc., and Visterra, Inc., and leading academic research institutions including Harvard and Stanford Universities.2 The most recent addition is an agreement to partner with Brii Biosciences, a start-up in China3 that has expertise and financial backing, Scangos said.

Vir’s different approach—and its mission—are what appealed to Scangos. “When I left Biogen, I really did not know what I wanted to do next or if in fact I wanted to do anything. Vir intrigued me. Bob Nelsen, the founding VC (venture capitalist), had the vision and saw the opportunity. There is such a need for better treatment for viral, bacterial, fungal—all infectious disease. A lot of pharma companies have decreased their work in this area or left this altogether. Many start-ups are underfunded and narrowly focused. So there was an opportunity for a company with a big vision and solid funding to attract really good people, and to make a difference. The vision and incredible need attracted me.

“I saw this as an opportunity to make a difference in the lives of tens or hundreds of millions,” Scangos said. “This will be the last thing I will do in my career. The opportunity to make lives better for millions of people is a great last endeavor.”

Vir’s approach does not focus on any one physiology or technology, but on the broad war against infectious diseases. “A lot of startups start around a technology and disease X; you form a company, work on disease X, and then figure out what else the technology is good for. I would not have gone to a startup like that.”

Vir’s approach of using science, biology, and immunology advances to create novel approaches to battling infectious disease will help to arrest hepatitis B, tuberculosis, and even the flu, which kills thousands. “We need to do better” in fighting these diseases, Scangos said. Antibiotic-resistant bacteria are another growing challenge and those are also on Vir’s hit list.

There is “incredibly powerful new technology to interrogate cells and populations of cells to determine changes that would cause them to be refractory to infection. Look at the host side of the equation, to augment the immune system or enhance it, don’t just look at bacteria. There’s a lot of insight already in how to do this, and more is coming every day. Not all antibodies are created equal: How they work, how to manipulate them to maximize their effectiveness, is moving forward rapidly. We can use this information to make the next generation of compounds with a reasonable chance of efficaciousness” to fight disease in a way that the previous generation could not. With Vir’s vision and the state of science, “there is a reasonable chance of succeeding.

“Vir started with the strategy of wanting to cure or treat serious infectious disease. So we assembled what we think is the best set of tools to go after these diseases. We have a pretty diverse array of technology: CMV (cytomegalovirus) platform for vaccine vector, siRNA (small interfering RNA) collaboration with Alnylam. Those aren’t random. If we’re going to approach these diseases, we need a set of tools with a serious chance of success. Hep B is a tough, clever virus, effective at countering the immune system. Almost certainly an effective treatment will require a combination product. We will develop our own compounds and may combine them with compounds from other companies—it’s not like we have all the answers.”

Where does culture come into what Vir is building? It may be just another tool in the Vir toolkit, as Vir is already partnering with multiple external companies and organizations; relationship building is key to the work that is underway.

Scangos cited the acquisition of Humabs as an example. “They are really good at what they do but we must pay attention to them and make sure they don’t feel distant from us. Collaborations with other biotech companies, with the Gates Foundation—we need to spend time on those relationships.” Ultimately, these partnerships “bring in technology and expertise that we’re way better off for [having].” This will continue to help as multiple manufacturing modes will be brought forward, including work with viral factors, antibodies, and siRNA. “We need more expertise in process development and manufacturing than most companies of our size.”

That so many diseases are problems outside of Western Europe, the United States, and Japan presents both an opportunity and a challenge, especially in dealing with regulatory agencies around the world. “If we have something to treat hep B, TB, or prevent flu deaths—most governments should be interested in getting this to their people.” One recent step forward: Vir’s Humabs subsidiary has, in collaboration with the US National Institutes of Health, produced a single monoclonal antibody called mAb1144 to treat Ebola virus disease. This experimental treatment is being administered to Ebola patients in the current outbreak in the Congo as part of a first-in-human trial.

As to whether Vir’s work will impact how other pharmaceutical companies view fighting infectious disease, Scangos noted that those companies are under different constraints from Vir, with global manufacturing and complex legal issues. “We have a freedom that they don’t have to focus on innovative science and medicine.” Vir does not have the depth of expertise in commercial manufacturing so “we have to do what we do well. We’ll have to work with partners to make products available around the world. At the right time, we will establish some of those partnerships.”

For now, Vir’s focus is on “generating data, moving programs for- ward, demonstrating some value and potential. At some point we will be able to combine what we do well with some of the larger companies.”

The Vir approach agnostically embraces new technologies with the potential for impact. “For Vir, we have our own R&D but are aggressively looking on the outside for interesting new things. As things change and new technology emerges I would hope we will be on top of them and get access to them.

“Vir is still a relatively new start-up. We have some exciting programs with meaningful potential, and we will be bringing a number of things into clinical development over the next months. We hope to get some human data in the relatively near future. We’re excited—we’re starting a number of research programs as well. We’re in a great period at Vir. No start-up goes from start to success in a straight line, but we’ve got the resources and people to have some staying power.”

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